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Got a Band?
Stop Problems Before They Start
The history of popular music is filled with disheartening stories of
bitter legal and personal battles between erstwhile best friends. The
usual circumstances involve a member of a band or ensemble leaving
the fold and then demanding their "fair share" of mechanical
royalties, publishing royalties, backline equipment, use of the band
name, or any of the myriad sources of revenue that a working group of
musicians can generate. Whether you are part of a classical chamber
ensemble, an avant-garde jazz group or a punk rock band, it is in
your best interest to avoid such acrimonious disagreements. They can
lead to extremely costly and time consuming litigation, not to
mention lost friendships.
Preparation is the key to avoiding potentially devastating disputes
between members of a musical group. It is not enough that you and
your musical collaborators talk about who owns what share of the
writing royalties, musical equipment, band name, etc., you must come
to a collective understanding and write the terms of that agreement
down in a coherent form.
The following information is not intended as legal advice, but rather
as a set of guidelines to get you thinking about your specific needs,
and how to construct a group member agreement. Here are five main
points that should be discussed and agreed upon between members of a
group:
1) Who owns the trademark to the band or ensemble name?
It is important to decide which original charter member(s) will
be granted ownership in the group name. Most group member
agreements are structured so that any departing members forfeit
their right to exploit the name, either in connection with another
ensemble or in connection with the sale or marketing of any
related goods and services (i.e. - merchandise, endorsements).
Sometimes the remaining members grant the departing member the
right to make references to the group name for solo performances.
If this is allowed, the trademark holder(s) usually requires the
departing member to make it clear that while they were formerly
affiliated with their group, they are no longer a participating
member of that group. Two ways groups enforce that point are to
require the departed member to bill him/herself first and also to
requiring them to render their former group name in a type size
that is much smaller than the individual artists' name (i.e. -
John Smith, formerly of the Flavor of the Month Band).
Another contingency that requires advance planning concerns who
should be able to exploit the group name when a majority of the
original charter members have departed the group, leaving a minority
- in many cases just one - original member continuing to record and
tour under that name. There are no clear answers to these questions,
but it is important that you and all members of your ensemble agree
to mutually acceptable terms.
2) How will the writing & publishing royalties be split?
Since it is rare that a composition is equally written between all
members of a group, it is important that all members of your band
or ensemble agree on who wrote each song and how the percentage of
that writing and publishing credit will be shared, especially when
one member leaves.
Many groups have a single songwriter or composer whom other members
readily concede is the sole writer. However, many times group
members collaborate on a composition by way of contributing an
instrumental arrangement, extra lyrics, solos, etc. In such cases,
each collaborator may share writing credit commensurate with their
contributions (i.e. - John Smith writes the majority of his music,
but splits up a small percentage of writer credit between his three
band mates for the songs whose arrangements take shape during
rehearsals and recording sessions). Another option is for the
dominant songwriter to retain the writer's share of the publishing
and then split the publisher's share of the royalties between the
other band members.
Barring any transfer of copyright ownership to a record label or
publishing company, a solitary writer will retain full copyright
ownership in the song for the term of the copyright (life + 70
years), and thus can exploit the song in any way he/she wishes to
whether or not they are still in the band which initially recorded
and popularized that song. However, if a song or composition is
co-written by a band member who leaves the group, he/she will
continue to receive their share of performance and mechanical
royalties in that song and will also retain some rights in regards
to future publishing decisions (i.e. - the ability to veto the
use of the song for commercials or movie soundtracks). Exactly
what rights the departing member will keep must be provided in the
group member agreement.
3) How are the record (mechanical) royalties split?
Mechanical royalties differ from writing and publishing royalties
since it is an industry standard to grant each band member an equal
share of the profits from record sales. Some groups decide to
continue giving band members their share of record royalties forever,
regardless of whether they are still playing in the band or not.
Some bands choose to cut the record royalty in half once a member
departs, under the reasoning that the former member is no longer
touring to promote the sale of that record. It is commonly accepted
that a departed member will not receive any compensation for future
recordings in which he/she will have no contribution. Whatever you
decide, it should be a unanimous decision between the founding
members.
4) What are departing members entitled to receive?
Let's jump back in time for a moment to the nascent stages of a
group. There are some standard clauses that should be inserted
into every band/ensemble member agreement. The agreement should
outline the duties that are expected from each member and provide
that a member can be dismissed from the group if he/she is not
performing those duties. Whether that decision to dismiss a member
requires a unanimous or majority vote is also something that should
be agreed upon.
So when deciding what a departing member should receive, the first
point to consider is whether the member is leaving the group on
account of his/her own freewill, or whether the band voted to
terminate that member's employment. Usually a band member that is
fired will not receive any share of future rights or profits.
A group member agreement should also address when a charter member
of the band decides to call it quits. One method of dealing with an
original member who decides to leave the band is to make a "buy-out"
offer, where the leaving member receives a lump sum of money, and
in return gives up their share of ownership in the band's name and
collective assets. When determining the amount of money owed to the
leaving member for band equipment, it is common practice for the
band's accountant or attorney to depreciate the value of the band
instruments and other shared sound equipment (amplifiers,
microphones, soundboard, etc) in order to reflect the current value
of gear that has been subjected to years of wear and tear.
Departing members usually retain their share of mechanical royalties
for their playing on past records, and will always retain performance
royalties for their agreed upon songwriting credits. Again, they
typically do not receive any royalties - performance, mechanical,
synchronization, artist, or otherwise - for any future recordings in
which they will not make a contribution.
5) What happens to the assets of a group when they all call it quits?
The band/ensemble member agreement should anticipate every possible
situation, clearly defining what shares of the band assets are
owned by each individual member. If a band should decide to
dissolve, then the assets are liquidated and the money is
distributed to the members in proportion to the share percentages
written into the agreement. If a band is signed to a record label
and owes them money for unrecouped (not yet collected) advances or
recording funds, that money should be paid back to the record label
first before being divided up between the band members. If a band
is independent and owns their own recordings, then the members must
sign another agreement that provides i) who has the right to
exploit the recordings, ii) if any permissions are required, and
iii) who will receive royalties and for what rights.
The issues listed above are just starting points that only skim the
surface of the deep sea of legal questions raised by changes in
band/ensemble personnel. So if your goal is to make music your
full-time job, and the other musicians in your group share the same
career-oriented ambitions, a written agreement between group members
makes good sense. Schedule some meeting time, contact an
entertainment attorney, and conduct a brainstorming session in which
the group tries to think of every conceivable event that could create
disagreement, tension and resentment between its members. Then plan
ahead to eliminate those potential problems by agreeing on rules that
will govern how those specific situations will be resolved. Your
preventative efforts may seem burdensome now, but may eventually save
you lots of time, money, and valued friendships.
(Thanks ED for sending this over!!)
by Parrish Ellis
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Sarchasm: The gulf between the author of sarcastic wit and the person
who doesn't get it.
Inoculatte: To take coffee intravenously when you are running late.
Hipatitis: Terminal coolness.
Karmageddon: It's like, when everybody is sending off all these
really bad vibes, right? And then, like, the Earth explodes and
it's like, serious bummer.
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